White House studying payroll tax cut, Trump confirms

WASHINGTON — President Donald Trump said Tuesday he is looking at a temporary reduction in payroll taxes and other measures to boost the economy as he continued to dismiss warnings from economists that the country could be headed toward a recession.

Trump told reporters at the White House that he has “been thinking about payroll taxes for a long time.”

The president said the cut was something he could likely do without congressional approval. He also said he was eyeing a reduction in the capital gains tax.

The Washington Post reported on Monday that the administration was considering a payroll tax deduction, a story the White House denied. But the president’s comments Tuesday confirmed that the cut is being considered with other economic measures.

Trump earlier this week criticized the news media and economists who are sounding the alarm of a global economic slowdown that could threaten the U.S. economy with a recession.

During an Oval Office meeting with Romanian President Klaus Iohannis, Trump also took aim at the Federal Reserve saying the central bank raised interest rates too fast and too high. He called on the Fed to lower rates.

“If the Fed would do its job, we’d have a tremendous spurt of growth,” Trump said.

Trump said the U.S. economy is “far from recession,” but he said the measures outlined today would put more money into the pockets of workers and keep the economy growing.

About 74 percent of economists surveyed by the National Association for Business Economics said in a report released Monday that the economy could tip into a recession by 2021. More than one-third said it could come next year.

Trump has campaigned for reelection on the strong economy and the reduction in unemployment while he has been in office. He said the stock market has soared 60 percent and unemployment is at historically low levels since his election in 2016.

The country’s economic growth has become a centerpiece to his pitch to voters for another four years in office.

Economists, though, point to a 6.4 percent drop in consumer confidence, an ongoing trade war with China and instability in the markets, as well as a global economic slowdown, in predicting a recession is near.

The group of business economists said those factors are eroding the short-term gains of the $1.5 trillion tax package of 2017.

And tariffs levied by the United States and China on goods has prompted a plunge in trade between the two countries.

The president said he would not back down in the trade war.

“We’re doing very well with China, but somebody had to take China on,” Trump said.

Trump said the measures he spoke about in the Oval Office were not prompted by warnings from economists or the possibility of a recession, which he dismissed.

He said the payroll tax cut, or a cut in capital gains, is being studied by his administration.

“Whether or not we do it now or not, it’s not being done because of a recession,” Trump said.

Contact Gary Martin @gmartin@reviewjournal.com or 202-662-7390. Follow @garymartindc on Twitter.